A Guide to Navigating the Complex and Nuanced Realm of Regulating Cryptocurrency

Abstract

While much about Blockchain and Cryptocurrency is unknown, novel, and lacks sufficient transparency, the potential applications of these technologies are immense. As with anything new and potentially profitable, there are a variety of ways in which the technology can be misused, either by well-intentioned individuals or by bad players in the space. Due to this reality, the markets pose an interesting task for lawmakers and regulators, with some involved players clamoring to limit regulations while others ask solely for the laws to be made so they can conclude what they can and cannot do within the space. My hypothesis is that the honest, and dedicated players in this space all typically believe in regulation and want it sooner rather than later while the less honest and more devious stakeholders instead push more for decreased regulations and oversight. Samuel Bankman-Fried was a fantastic example of the latter, as he legitimately campaigned in Washington for decreased regulation of cryptocurrency marketplaces. It was then understandable why he was against regulation when his plans came out and his fraudulent nature was revealed. Through a combination of interviews, research, and regression analysis, I aim to prove that the industry can and should be regulated, as well as providing some examples of how to do so.